As part of a larger OPEC+ agreement to reduce output in response to falling oil prices and an impending supply glut, Saudi Arabia will implement significant production cuts in July. Saudi Arabia's energy minister, Prince Abdulaziz, stated that if necessary, the 1 million barrels per day (bpd) reduction by Riyadh might be extended past July. "This is a Saudi lollipop," he declared.

After seven hours of negotiations, OPEC+, which consists of the Organisation of the Petroleum Exporting Countries and allies backed by Russia, resolved to lower global production targets starting in 2024 by an additional total of 1.4 million barrels per day.

The group cut the targets for Russia, Nigeria, and Angola to bring them in line with their actual current production levels, thus many of these reductions won't actually happen.

The United Arab Emirates, on the other hand, was permitted to increase output.

Around 40% of the world's crude is produced by OPEC+, therefore its political decisions can significantly affect oil prices. OPEC+ has already implemented a 2 million bpd cut that was agreed upon last year and accounts for 2% of global demand.

Additionally, it consented in April to a sudden voluntary cut of 1.6 million bpd that began in May and would last through the end of 2023.

Oil prices rose $9 per barrel to over $87 after the announcement in April, but they quickly fell back under pressure from worries about demand and global economic development. International benchmark Brent reached a settlement price of $76 on Friday.

Western countries have charged OPEC with manipulating oil prices and harming the world economy by driving up the cost of energy. In addition, the West has charged OPEC with supporting Russia despite sanctions over Moscow's invasion of Ukraine.

OPEC insiders responded by claiming that over the past ten years, the West's money creation has caused inflation and compelled oil-producing countries to take action to preserve the value of their principal export.